Applying Hidden Pivot analysis dispassionately to the Dow Industrials’ monthly chart reveals that this summer’s carnage could conceivably be just a correction rather than the resumption of the Mother of All Bear Markets. As the chart shows all too clearly, the current selloff has merely created “dueling” impulse legs on the long-term chart, with bulls still holding a slight edge when the power of the offsetting bull and bear impulse legs is compared.
From the monthly archives:
August 2011
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Most of us expected mining stocks to get hit when the broad averages finally collapsed. Take a look at the hourly chart of this stock before you despair, however, since the carnage has been far worse for companies not in the gold or silver business. I’ve reproduced a chart of Apple on this page today as well, and as you can see for yourself, Silver Wheaton’s chart looks no worse. We continue to hold the September 42/46/50 call butterfly for $1.04.
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Flight to Treasurys Has Little to Do with ‘Quality’
by Rick Ackerman on August 19, 2011 8:06 am GMT · 11 comments
The news media will eventually figure out the truth — that stocks got pulped yesterday simply because they are in a bear market. The Mother of All Bears, quite possibly. The Dow finished the day down 419 points after trading more than a hundred points lower than that intraday. The selloff was attributed to the usual suspects: “fears” over Europe’s shaky financial condition, and America’s apparent relapse into recession. Although both concerns have been with us in spades for more than a little while, they seem, suddenly, to have become overwhelming and unmanageable now that the world’s stock markets are imploding. Of course, there will be equally spectacular rallies in the days, weeks and months ahead, and, as was the case during the 1930s, they will be interpreted as signaling a glimmer of hope for the economy. The press will do the interpreting, but most Americans will know better. The Great Recession has returned with a vengeance, and predictions of 2% GDP growth are about to be trimmed to sub-zero by the same morons who were so optimistic just a few weeks ago. » Read the full article